Homeowners get sued for bad reviews on Angie’s List

Interesting column by John Kelly on the Washington Post about 2 different homeowners being sued by the same home improvement contractor for defamation. Monica Hammock is being sued by Stephen C. Sieber, owner of the SCS Contracting Group operating out of Maryland for $6 million “charging that she made false and defamatory statements on Angie’s List with the intent of damaging his reputation.” Another reviewer, John Poole, is also being sued.

Interestingly, Angie’s List is not being sued.

Sieber said that he’d like to sue Angie’s List but that his attorney tells him it’s protected. So he’s going after Hammock and Poole instead.

This surprised me … because when I consulted with a lawyer recently about related issues, reviews and defamation came up for discussion. My lawyer said to be wary, that a review site could possibly be held responsible for “promulgating” the defamation of a bad review.

Maybe Angie’s List is protected by their standard User Agreement which states:

“I acknowledge and understand that I am solely responsible for all reporting information submitted by me to Angie’s List in connection with my membership, and that Angie’s List bears no responsibility whatsoever for statements made by me or anyone acting on my behalf. I agree to defend and indemnify Angie’s List if it is finally determined that the reporting information I provided to Angie’s List was false and inaccurate.”
– Angie’s List standard User Agreement

If Angie’s List was a news site, then it would be protected under “freedom of the press” where to prove defamation, you must also prove malicious intent. Angie’s List didn’t write the reviews any more than any other published reviews so no malicious intent. But is Angie’s List the press? Probably not …

I emailed the writer John Kelly for more information. Why is Angie’s List protected from being sued? Mr. Kelly wrote back “… his lawyer told him that the FCC’s Communications Decency Act protects web sites …”. I did some digging and there seems to be something in this – the courts have upheld that the CDA of 1997 “creates a federal immunity to any cause of action that would make service providers liable for information originating with a third-party user of the service”. Well ya learn something new every day. Thanks John for the prompt reply.

With “social media” and the rise of the “review culture”, it’s easy to forget you are responsible for what you write on the web – reviews are commonplace now. But did you realize that every time you write a review online, the fine print says you are legally responsible, not the site hosting your review? They may “own” your content as soon as you press the submit button, but if someone complains, they will say you are responsible.

If what you have to say in the review is true, then it’s not defamation. But it’s still a stressful – and expensive – situation to be in. The article mentions that Angie’s List “might help with Hammock and Poole’s legal bills”.

Let’s just say I’ve spent some time in the home improvement review business in my former life. From direct experience (stats!), the majority of homeowner reviews are positive. Writing bad reviews is not something homeowners take lightly. It wasn’t unknown for a homeowner to have a bad contractor experience, write a review about it, then have second thoughts before publishing. Other times homeowners have changed their minds after being contacted by the contractor or a lawyer. If the contractor handled the situation as a “customer service” matter, homeowners often upgraded the review of their own accord because of the efforts made to resolve the matter. So based on first-hand experience, bad reviews are more likely to be underreported, not the other way around.

Yet Mr. Sieber had bad reviews from unconnected Angie’s List reviewers. That’s a red flag for me. Furthermore:

In 1990, Sieber was the subject of a segment on ABC’s “Primetime Live” in which Diane Sawyer wondered whether he should be dubbed “the Contractor From Hell.” In 1992, after complaints from homeowners, he signed a settlement with the Montgomery County Office of Consumer Affairs, agreeing to cease home improvement work for three years.

Sieber told me that he’d rather not comment on his Montgomery problems. “That goes back to a company long, long ago that has nothing to do with [the current case],” he said.

Big red flag. He says that stuff is way in the past. And Ms. Hammock’s problems occurred in 2003.

Well what about this Better Business Bureau Reliability Report that says Mr. Sieber has had 5 complaints lodged in the last 36 months?? To be fair, most of these have been resolved and no complaints in the last 12 months. But overall, there seems to be a trend here.

The irony? Mr. Sieber was interviewed by another writer from the Washington Post about homeowner-contractor relationships just a few months ago, not as an offender but as a contractor commentator. Uh, doesn’t the Washington Post check references? Kidding!

Anyway, here’s what he had to say about the homeowner-contractor relationship:

“It’s sort of like a marriage,” said Stephen Sieber, owner of SCS Contracting Group in Burtonsville. “There’s a lot of different people and a lot of different variables. It’s a challenging situation.”

Sounds like Mr. Sieber is in need of a little “marriage counseling”, and then some.

Contractors speak: why good help is hard to find

A while back I read an article on SFGate.com answering a question from a homeowner who was having a hard time finding a home improvement contractor. She was trying to get three bids with references, without success.

“While it sounds prudent, I live in Vallejo and I can’t get a single pro to come out to my house, let alone three of them. I have been stood up many times and have been disappointed with the few that have come out.”
– Burnett Brothers Q & A, San Francisco Chronicle

The writers advised her to work her network (friends, family, coworkers, etc.). Then try local real estate agents, who usually have a stable of professionals to call on when getting homes ready for sale. Finally, they suggested checking out Angie’s List, an online home improvement review site that has been getting good publicity.

Their observations on the root of the problem:

In our minds, the cause of the dearth in tradespeople is twofold: the real estate boom and the lack of skilled workers — especially those willing to take on home-improvement projects. It’s simple supply and demand. Too many jobs are chasing too few workers. The good contractors can afford to cherry-pick, and you don’t want the bad ones.

Since then, they’ve published a follow up article with more suggestions from readers such as trying other websites, homeowner associations, the BBB (Better Business Bureau), and even the NARI (National Association for the Remodeling Industry).

The most interesting thing about this follow up, though, was the responses from contractors.

You know you’re supposed to vet contractors before you hire but did you know they also vet you?

Trust. If the contractor doesn’t think the homeowner trusts him, it will be an uphill battle to get the job done. So some will turn it down. Do you blame them?

How did they find me? Contractors trust referrals from people they know more than from the internet … just like you do.

I decided to do a bit more digging and found this thread on ContractorTalk.com. The question for discussion: Should homeowners have to provide references for contractors? “To find out if the Homeowner was a good customer, or a PITA or Deadbeat”. An interesting and insightful read, if you dare.

Multiple bid situations are not a desirable situation for a contractor. It takes a lot of time and effort to put together a bid … to not have a realistic chance of getting it. As one anonymous contractor said “why compete when the market doesn’t require me to?”.

Operating costs. Doing small jobs doesn’t make financial sense. And estimates aren’t really free. “The cost of visiting the job and performing the estimate has to be worked into the cost of the work”.

“Next, there is a cost to everyone from selecting the too-low price. The last thing you want on your job is a contractor who is not making any money. When people realize what they are doing isn’t profitable, they take all kinds of shortcuts to make up the loss.

“If you sound like you know what you want, and it’s a clear, straight-up process, a contractor will be much more likely to spend the time bidding and communicating with you because they know it is more likely to be a successful job.”

The last word from the Burnett Brothers:

The bottom line is to define and communicate the scope of the work. Change orders are expensive. And expect to pay a fair price. If you do this, you’re more likely to get a contractor to show up when promised, actually do the work you want and charge the estimated price.

Read more: Contractors weigh in on why good help is so hard to find on SFGate.com

DIY Part 3 – DIY Disasters – When Doing It Yourself Goes Wrong

When taking on DIY projects, one can’t understate the need to know your goals, quality level need to achieve,and to know your limitations.

A do-it-yourself project, when executed well, can save you money and give you tremendous satisfaction of a job well done. You did it! And it looks great …

But when a DIY project goes wrong, there can be any number of negative consequences, from minor inconveniences (no power? shower in the back yard anyone?) to being forced to move out while professionals repair the damage. Not to mention a negative affect on the value of your home.

By the same token, if you inherit a home that had extensive DIY work done, it may be wise to get it checked out by a professional. This news report describes how homeowners assumed their unfinished basement was good to go because it had electricity. Turns out the electrical work didn’t meet code, and their home could have burned down. Ouch.

Blame it on HGTV, where fabulous renovations seem to be conceived, completed, cleaned up and enjoyed in the space of half an hour. So seductive. If only it were so easy. It’s only after people get into it that they realize they’re in over their heads and need help.

So who would they call? Usually, a handier friend or neighbor. In the past, professionals often wouldn’t get involved due to warranty and liability issues. In addition,

During the recent housing and renovation boom, many contractors shied away from such jobs, too, because they were too small and could involve challenging clients. “If you come into a botched kitchen, you are already dealing with an aggrieved homeowner, and you are going to have to tell them that it is going to cost more than they ever thought it would,” says Paul Winans, a California remodeler and chairman of the board of the National Association of the Remodeling Industry.
– Sara Schaeffer Munoz on RealEstateJournal.com

That was then. This is now. Increasingly, it’s a skilled professional who gives “DIY Support” or “DIY Disaster Recovery” as the case may be. Part of this is financial reality, part of this is embracing the fact that more and more people are doing it themselves in the last couple of years. Getting DIYers out of jams is a new business opportunity for skilled professionals looking to expand their services, locally and on the internet.

HomeFIXology is one of many handyman franchises created with serving the DIY disaster market in mind. Handyman Connection, on the other hand, views this as a “niche and growing market”.

On the internet, BobVila.com has a My Projects forum where DIYers can get help from others online. In the blog world, Master Electrician Wayne Gilchrist answers DIY questions on his blog and offers DIY support services on EZDIYElectricity.com (read my upcoming interview with Wayne in DIY Part 4).

Even HGTV is now capitalizing on this trend, with it’s new show “Over Your Head“, hosted by the noticeably photogenic Eric Stromer. An interesting turn of events. Each episode features a real DIY Disaster that is addressed by Stromer and his team. What’s really telling on these shows? That its frequently not the DIYer making the call for help. Oh no, it’s his or her spouse. What I call the “Honey I’m home – my god, what have you done?” effect. Sometimes people are in deep trouble and don’t really know it.

“Over Your Head” is currently looking for “frustrated do-it-yourselfers”. See this listing on Craigslist. You can also apply online here. Your DIY Disaster has to be of your own doing, not a botched contractor job; apparently they can tell the difference. Homeowners who apply and get the gig “will not be compensated per se, but they will receive professional services and additional materials needed to help complete their project”. Nice work if you can get it, and don’t mind wearing a little egg on your face on national television.

For those who have to pay, bringing in a professional contractor in to fix the mess may end up costing you up to 50% more, especially if there is structural damage to correct. If it’s something that can be done by a handyman, you should note that the average cost is around $400 – $500. For other types of projects or questions, you may only need support over the phone.

But there are other worries beside money for struggling DIYers. Embarrassment and a sense of failure. After all, doing it yourself is about feeling empowered, capable, and independent. Admitting that you need help is tough. It helps to know that the professionals who deal with these sticky situations are (usually) sensitive to your feelings. They know you “need a friend” and the knowledge, insight, and corrective action to get the job done, not a long lecture.

Home Depot Exposed – Gouging Customers for Remodeling Projects

For some people, the Home Depot brand is synonymous with Home Improvement. But in the last few months, at least in California, the once trusted brand has become associated with far less desirable words – “nightmare”, “horror story”, and now “fraud”.

Home Depot is being investigated by KNBC in Los Angeles for ripping off customers.

KNBC (NBC4 TV) reports that these allegations are backed up by statements from Home Depot insiders (former salespeople and subcontractors).

NBC4 has heard from customers in 22 states and from insiders from across the country, who have given NBC4 a paper trail of internal documents, suggesting the company overcharges customers on window and siding installations, kitchen remodels and on roofing jobs.
– Joel Grover and Matt Goldberg, NBC4 TV

In October 2006 when the investigation started, KNBC’s focus was on service issues in California. Now, it’s gone all the way to outright fraud, with complaints from across the nation.

Home Depot’s response to this latest charge has been to apologize for the situation and promise to investigate. “We have no practice overcharging customers in any way, shape or form”.

It’s a fascinating, if unsettling, read. The video should be up later this morning.

Home Depot Investigation – Part 3 – Article and Video on NBC4 TV

Home Depot Investigation – Part 2

Home Depot Investigation – Part 1

Texas to get tough on Home Improvement Contractor Fraud

New legislation has been introduced to overhaul the Texas Residential Construction Commission. Bill 1686 is designed to give more protection to homeowners and seniors in particular.

The bill highlights:

• all home builders to be registered with the TRCC
• all home improvement contractors doing work over $2500 to be registered
• free TRCC complaint process for homeowners
• criminal charges can be laid against offending contractors
• establishment of a recovery fund to help provide relief from certain types of damages
• much more …

From a statement released by the Texas House of Representatives:

There are many reputable builders and remodeling contractors who do a good job on home improvement projects. For those who don’t, we’re putting some teeth in the law so that homeowners will be protected … There have been too many horror stories of contractors who have taken money from elderly homeowners and left the job half-done, or not done at all. This Bill would put a stop to that kind of scam.
– State Representative Ruth Jones McClendon (District 120, San Antonio)

Read the actual Bill (PDF).

Rep. McClendon’s Press Release.

Detailed report on HomeOwners for Better Building, a consumer action site.

DIY Part 1 – Do it yourself or hire a contractor?

Do it yourself (DIY) Home Improvement is on the rise. Part of this has always been about saving money. But in recent years, I think the trend has also been fueled by the media (TV), better tools, and better access to how-to information (internet, big box seminars).

DIY success depends on a lot of things, the most important being knowing your limitations. Remember, you may be replacing a professional contractor who brings knowledge, skill, experience, planning, project management, the right tools and the right materials to the job. It’s best to do a thorough evaluation before going ahead with your DIY project.

#1 – Research – Do you have the Skills?

What does the project involve? It’s important to “do your research” before getting started. Read books and articles on the internet. Talk to friends and acquaintances who’ve done it before. Or consult a professional. Write out the steps involved. Then you can better ask …

Do you have the required skill? Do you understand all the legal stuff? Building codes? Electrical code? Can you acquire the knowledge needed to cover any gaps?

What are the risks? Do you understand what could go wrong? Do you have a backup? Or resource to ask for help?

If not, you should hire a contractor or try something a little less ambitious that you can pull off to start.

If on the other hand you think you can pull it off, you should still look at …

#2 – Cost – Will DIY Pay Off?

When it comes to cost, the point of doing it yourself is to save money.

Although contractors can often get products and materials at lower cost, that may not amount to a significant reason not to do it yourself. When it comes to tools, you may be able to rent or borrow what you don’t have if it’s not feasible to buy so that shouldn’t be a barrier either.

What’s going to cost you when doing it yourself is mistakes, especially if a professional needs to come in to correct it after the fact. That will blow your labor savings and then some, so you need to be sure you can execute flawlessly.

If you know you don’t have all the skills to execute the full job, it may be possible to still participate in the project by doing some of the prep work or cleanup to help defray the costs. This should be discussed with your contractor up front.

Another option is to act as your own general contractor, hiring subcontractors to do the work directly. Again, you should only take this on if you know what you’re doing, or rather understand what your subcontractors will be doing … So it comes back to having the knowledge, skills, and experience.

But money isn’t everything …

# 3 – Options – Your Time Is Valuable Too

How much labor is involved? Doing all the research, purchasing, and actual project work will add up. How long will it take for you to do it yourself part time? Are you a patient person? Will you have to forgo some other opportunity?

If it’s going to take you 3 months of weekends and the house in chaos, it might be quicker and cheaper to have a professional do it in a fraction of the time.

On the other hand, if you have the time, can do it right, and will enjoy the work, it may not be work at all. And all the satisfaction of a job well done will be yours.

Do it yourself or hire a contractor: it’s best to consider all the factors before making a decision.

The Current State of Home Improvement Scams

“… fraud is nothing more than the skin of the truth stuffed with a lie.”
– Elliot Minkman, reformed con man

Here are a few current Home Improvement scams to be aware of and obviously avoid.

The Home Improvement Grant Scam. You are notified by mail that you are eligible to receive a Federal Grant for home improvement, medical bills, or other expense – the first installment cheque may even be included. Or perhaps you see an ad for such a grant in a local newspaper. All you have to do is call the 1-800 number to claim the grant, it’s “free” to apply. Once you get on the phone and start giving your information (including license and social security numbers, even account numbers for financial institutions), you acquire extra “service charges and handling fees”. No matter what the pitch, the goal is to get you to pay that “one time” handling fee …

Sounds too good to be true. So why do people get taken in? I see two factors. First, the pose as a “government representative” causes people to drop their guard. Government rep = credible authority figure. More importantly, it’s the lure of “free money from the government”. We’ve all heard about it, so that’s the “truth” that makes the lie persuasive.

The Federal Trade Commission issued an alert on this late last year. You can read more on combating such scams on the FTC website – Free Government Grants: Don’t Take Them For Grant-ed.

Home Improvement Contractor Scams. Seniors are often the target of these “door to door” scams. Professional scam artists (as opposed to real, hardworking contractors) may knock on your door offering to do repairs that may or may not need to be done. They may offer to fix or redo your driveway for a substantial fee but actually only paint it black and leave. Or arrange to do a roof repair, take a deposit, never to return.

They can seem very convincing. In one “worst case” news report, the scam artists posing as roofers went so far as scale the roof to bring down a shingle to prove to the 80 year old prospect that the roof needed repair. So she trusted them, let them inside … only to be robbed at gunpoint.

Obviously all the usual “rules” about hiring contractors should apply. So why are seniors more vulnerable? There’s a lot of information on this topic … and it may all be relevant. But at the bottom of it all, I think it’s because the average senior may not be able to physically do as much as he or she used to. In that way, seniors can be more dependent on help from other people and good help is hard to find. When it shows up at your front door, well why not??

Read more about how to complain if you are the target of home improvement or other fraud.

Home Improvement Contractor complaints down in NJ 2006

Is New Jersey tougher on contractors? New Jersey’s Department of Consumer Affairs has reported a 25% decrease in consumer complaints about home renovation contractors this past year. Why? While judgement is still out on this one, it seems that Jersey’s new Home Improvement Contractors Registration Act, which requires mandatory registration for access to work permits and operating in the home improvement business , may have been the key factor.

Read more analysis from Consumer Action at pressofAtlanticCity.com.

Read the original AP Article.